He says they will open source it which is cool. I agree that I don't understand what's novel here. Playing with a physical controller and camera on a laptop GPU in real time is cool, and maybe that hasn't specifically been done before, but it doesn't seem surprising that it is possible.

If it is substantially more sample efficient, or generalizable, than prior work then that would be exciting. But I'm not sure if it is?

Maybe that's exactly his goal: not to come up with something that beats the competition, but play with the architecture, get a feel for what works & what doesn't, how various aspects affect the output, and improve on that. Design more efficient architectures, or come up with something that has unique features compared to other models.

If so, scaling up may be more of a distraction rather than helpful (besides wasting resources).

I hope he succeeds in whatever he's aiming for.